05 Oct 2026
The global ship recycling market entered October with a familiar problem: buyers are looking for ships, but suitable recycling candidates remain in short supply.
The notable change this week came from Bangladesh. After several weeks of rebuilding demand, Chattogram has moved back to the top of the South Asian market as recyclers become more aggressive in their search for available tonnage.
This is not a supply-led recovery. Quite the opposite. The limited number of vessels coming forward is forcing buyers with open yard capacity to compete harder whenever a workable candidate appears.
At the same time, the wider shipping market continues to give owners reasons to delay recycling decisions. Freight has eased from recent highs, but earnings remain attractive enough for many ageing vessels to continue trading. Oil prices have also retreated, although security concerns around the Strait of Hormuz continue to influence voyage planning, insurance and tanker economics.
The result is a recycling market with plenty of appetite, but not enough ships.
Bangladesh has entered the fourth quarter in a considerably stronger position.
Yard capacity is available, end-buyer interest has improved and recyclers are showing a greater willingness to compete for the limited tonnage currently on offer. The market has therefore moved ahead of Pakistan after a relatively subdued third quarter.
What makes the shift particularly interesting is that Bangladesh's domestic steel market has remained largely stable. The stronger buying mood is therefore less about improving steel values and more about straightforward requirement.
A fresh sale was also reported during the week, with the cement carrier Asia Cement No.3 changing hands on an “as is” Taiwan basis. While this type of transaction cannot be directly compared with a delivered Chattogram sale, it provides another sign that commercial activity is beginning to reappear.
The waterfront itself remains active. Previously secured gas carriers, tankers and other vessels have continued to arrive and deliver, keeping yards occupied even while the fresh sales pipeline remains relatively thin.
Chattogram has regained its appetite. The next question is whether owners will provide enough ships to satisfy it.
Gadani has moved behind Bangladesh this week, but the change should be viewed as a cooling in immediate buying urgency rather than a loss of underlying demand.
Pakistani recyclers were among the most aggressive buyers during the earlier period of severe vessel scarcity. That buying run created a pipeline of ships that has since begun arriving and delivering, easing some of the pressure on yards to secure every candidate immediately.
Local fundamentals remain relatively steady, with neither steel nor currency showing the kind of deterioration that would suggest a broader retreat.
Pakistan therefore remains an important buyer for suitable tonnage. The difference is that Gadani can now afford to be more selective than it was during the height of its earlier buying run.
Bangladesh currently has the stronger immediate requirement, but Pakistan remains firmly involved.
India had a quieter transaction week as local holidays interrupted activity, but the underlying Alang story remains largely unchanged.
Domestic steel recovered noticeably after the previous week's weakness, improving the economics available to local recyclers. Some of that support has been offset by a softer Rupee, but the steel recovery is nevertheless a more constructive development for the market.
India's main strength, however, continues to sit outside the conventional bulk and tanker segment.
LNG carriers, reefers, passenger vessels, ships with higher non-ferrous content and compliance-sensitive tonnage continue to generate stronger interest in Alang. These vessels can command a very different response from Indian recyclers compared with ordinary steel-heavy candidates.
This distinction remains important when assessing the Indian market. Conventional tonnage continues to face stronger competition elsewhere in South Asia, while specialist vessels can still find compelling opportunities in Alang.
Turkey enters October with its post-summer improvement still intact.
Aliaga recyclers continue to show selective appetite, but there has been little fresh transaction activity to justify a significant change in the market.
The Turkish Lira remains the main constraint. Continued currency weakness reduces Dollar purchasing power and limits the extent to which local recyclers can compete with South Asian buyers for conventional vessels.
Turkey therefore remains focused on the areas where it has traditionally been more competitive: geographical advantage, specialist ships, European-linked recycling opportunities and Basel-compliant trades.
The market has improved from its summer lows, but its underlying structure has not changed.
Dry freight finally gave back some of the strength seen during September.
The Baltic Dry Index declined from recent highs before recovering modestly toward the end of the week. Capesize, Panamax and Supramax markets all remain at levels that continue to offer owners viable employment opportunities.
That matters directly to ship recycling.
For an ageing vessel to move seriously toward recycling, the economics of continued trading generally need to become less attractive. Freight is moving in that direction, but it has not yet reached the point where owners are being pushed toward the exit in meaningful numbers.
Softer freight helps recyclers.
What the market really needs is enough weakness to change owners' decisions.
Conditions around the Strait of Hormuz also remain relevant.
Middle East crude flows have improved and oil prices eased during the week, reducing some of the immediate pressure seen during September. However, further tanker incidents have shown that improved cargo movement does not mean shipping conditions have returned to normal.
Security, insurance and voyage risk remain part of the commercial calculation.
As long as tanker employment remains attractive, owners of older vessels continue to have an incentive to trade rather than recycle. That keeps another potentially important source of recycling tonnage away from the market.
Bangladesh may have moved into the leading position this week, but the broader ship recycling story has changed very little.
Chattogram wants ships.
Gadani remains interested.
Alang continues to find opportunities in specialist tonnage.
Aliaga is holding its improved seasonal position.
What all of these markets are competing against is the same shortage of available recycling candidates.
Owners still have employment options, second-hand opportunities remain open and freight earnings have not weakened enough to trigger a meaningful increase in recycling supply.
For now, the competition between recycling destinations is being shaped less by an abundance of ships and more by the battle for the few candidates that do become available.
The market leader has changed. The shortage has not.
For detailed vessel indications, market rankings, steel prices, port positions and ship recycling analysis, access GMS Weekly through the GMS website or mobile app.
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